China to Restrict Polysilicon Production

China will issue detailed entry standards for domestic polysilicon companies, a measure designed to prevent a production boom/bust cycle.

In 2009, China's estimated polysilicon production output skyrocketed by 300% against 2008 levels to reach 18,000 tons, fulfilling half of domestic demand. These data were reported by Li Baoshan, secretary general at Beijing-based Chinese Renewable Energy Society, on March 16 at Shanghai's 6th China SoG Silicon and PV Conference (CSPV).

Thanks to a flood of new entrants in 2008, Chinese polysilicon production output broke into the five-digit numbers for the first time. However, that surge has also brought worries about oversupply, as capacity for the country's completed projects, under-construction projects and planned projects reached about 44,000 tons, 68,000 tons and 126,700 tons respectively as of September 2009, according to Wang Bohua, deputy counselor of China's Industry and Information Technology Ministry.

Meanwhile, Mr. Wang reported that the upcoming entry standards will follow the government plan issued last September, restricting new polysilicon projects with less than 3,000 tons of annual capacity and high power consumption. However, Mr. Wang declined to disclose the issue date and other details.

Another variable that will impact China's polysilicon production is the central government's plan to set up silicon products standards based on market demand and producers' technical levels, he added.

Statistics from China's Industry and Information Technology Ministry show that mainland China produced over 4,000 megawatts of PV cells in 2009, using about 32,000 tons of polysilicon in the process.